Mathias Hasselmann

On Populism

Funny posting on planet gnome today: A message to liberals. No comments enabled on that blog. Not nice: Post to some closed circle (forum, social network, ...) if you fear feedback.

Anyway.

A quick look at the situation in Greece and UK should be enough to understand where this is going.

In Greece was ruined by some pervert kind of socialism: Use cheap money to give the population unreasonable gifts, to ignore tax evasion, to bloat public service beyond all sanity, to pay unreasonable wages.

UK is a different story, they indeed have some quite liberal society. To me it seems they somehow failed to regulate their finance market by a) not properly taxing it b) moving the risk from share holders to tax payers c) letting banks betray citizens by handing out unjustified loans. This all caused a giant finance bubble and massive brain drain in producing industries.

Notice that in liberal theory governments are required to create proper basic conditions, enforcing sane behavior. Letting people just do what they want is anarchy, not liberalism.

Comments

Phil commented on October 11, 2011 at 2:09 p.m.

You seem to be suggesting you could have a neoliberal system in which you tell people to do whatever they want, within some sandbox.

The reality is that reality is very complicated, so people are told to whatever they want, but not X, and they simply do X' instead.

But of course even if you made a sandbox people would still try to game the rules and would soon succeed. That is unless you could formally prove your ruleset had no flaws, which would require a huge simplification of the current system, redefining even basic economic freedoms.

I'm not saying that's a bad thing, but it's definitely not economically liberal.

Miemie commented on October 11, 2011 at 2:23 p.m.

You seem all fired up about someone giving liberalism a bad name, but you do the same for socialism. :)

When talking about liberalism, it would be perhaps more clear to distinguish between liberal sociaty (or liberal values) and liberal economy, as they usually haven't got that much in common. If you talk about the UK being a liberal society, it sounds to me that you're referring that the UK has liberal values, which I think it does not. UK is a conservative society (in many peoples opinion). But it indeed has quite a liberal economy. Well, as you said, they're probably executing it poorly, with the reasons you give.

But the a) b) and c) are the same reasons you mention for Greece as well. Except in Greece they had all that plus the bloated public sector. All western countries have unreasonable wages in almost all sectors when you compare them to wages in third world countries. (And that's the heritage of colonialism, I think.) A bloated public sector doesn't equal a pervert kind of socialism. At least with the definitions of socialism that I've come to expect.

But then again the definitions of socialism and the definitions of liberalism might vary a lot. So maybe instead of these labels, we should focus on the issues, which I believe most people agree with are the things you listed on your post. I also think the original poster had some very good points as well like this sentence: "We gave everything to those who were already born with everything."

I believe the whole global economic system might need some fresh ideas. I don't have those, but maybe a bit more regulations and taxes on the transfer of money and stocks might be a good start. So that the finance/funding sector would also pay for the profits they are making.

But it's great that you have your commenting on!

Benjamin Otte commented on October 11, 2011 at 2:32 p.m.

I'll claim that this is a cultural problem. We've evolved the Western culture into a bunch of short-sighted egoists. And we're proud of it!

As long as the tragedy of the commons exists, this will not be solved.

Pietro commented on October 11, 2011 at 3:23 p.m.

This morning I saw that post too. Since your commenting is on (thanks!) here it goes :-)

Clearly it was unnecessary for the financial markets to crash and burn in the way they did. Thank you Greenspan and thank you ECB. You should have seen this coming. Banks can not be trusted and no matter what you do their greed will always win. Time for a major overhaul. And when you are at it, kill the billions of flash trades that benefits nobody except the brokers. And regulate hedge funds such that they need to come up with at least 25% in hard cash of whatever evil concoction they came up with this time. Oh and Federal Reserve & ECB: please hire some new people who understand CDO's and similar creative "securities". Maybe that helps preventing the next Global Financial Meltdown...

About Greece. The crack must have been of exceptional quality when the European commission decided to bring in Greece. Iirc the people that pushed for Greece to join the EU and did the final negotiations consisted mostly of socialist heavy weights. They ignored that tax evasion is normal in Greece, that most of the taxpayer's money goes to pay civil servants who do nothing all day, that the country was inevitably headed for bankruptcy. Still they insisted on bringing Greece in because that is what socialists do: everything goes as longs as it results in the United States of Europe with all national powers transferred to Brussels where they will rule. And they will just make the northern European countries pay for it.

How to solve this mess? Stop allowing 3rd world countries to join the EU, even those that are in the process of joining. They will only cost money and will not contribute. Kick Greece asap out of the EU without paying them a dime. They created their own mess. Let them solve it themselves. Maybe they learn something like what "working" and "paying taxes" is. Next force the governments of Spain, Italy (without Berlusconi please), Portugal and Ireland to start making a ridiculous amount of effort to fix the self-induced crap they are in (thank you socialists for allowing them the leeway in the first place). And finally, kill all plans for and block all roads to a United States of Europe with all power to Brussels which is championed by socialist "we must be bigger than Germany" France and all the bankrupt EU countries (duh, "Brussels" will give them the financial bail-out).

So to "np237" I can only say: the socialists are responsible for problems with Greece and all other soon-to-be-bankrupt EU countries. Time to take it like a man and accept responsibility for the staggering damage your team did.

Joaquim Rocha commented on October 11, 2011 at 4:14 p.m.

Pietro, you fail to see that the EU laws weren't applied all equally throughout Europe. I'm talking about policies of decreasing fishing, decreasing manufacturing, etc. which not all countries fully obeyed or applied the same way.
You also fail to see that if countries like Germany sold so many stuff was also because of the common currency.

Mathias is right about the government bloating, tax evasion, high wages, etc. in Greece and also in Portugal. Still, I'm astonished that you (Pietro) see the EU as "you got money? come in! now you got problems, get the f**k out!". That is more a rich boys' club than a union.

I'm not suggesting that we forgive the debt of the countries in trouble but did you know that the two rich guys in the club once had debts that were forgiven? http://articles.businessinsider.com/2...

My idea is different. I think the EU should think of itself more like a Union and intervene when its states are getting off-track, this can be mostly solved with a common tax policy. The ECB should loan the money directly to the countries, not to banks who loan it then to countries applying a different interest rate per country. The EU should create its own rate agencies to balance things with the obscure interests of USA's rate agencies' ones. Finally, people should be bailed, not banks. If banks allow high-risk loans, they should be the ones to pay for it when the s**t hits the fan, not the people's taxes and more credit generation.

A European who loves the EU and its member states,

stephane commented on October 11, 2011 at 4:26 p.m.

Pietro, Mathias

I don't want to be rude or anything, but I just would like let you know that
1. Before 2009, Geece was ruled by right wing liberals, that during the last 10 years.
2. Italy was ruled mainly by right wing liberal (Silvio & al)
3.Ireland is ruled by right wing liberal since 1994 (Fine Gael,Fianna fail)
4.president of the european commision (J.Barrosso) is right wing liberal ( pm of Portugal before mid 2005)
5.President of European council (H.Vanrompuy) is right wing liberal (belgium cd&v)
6.European parliment is massively liberal
7.It's right wing coutries like Poland etcs that don't want of a more united Europe

Spain and Portugal have been (here you have right) ruled by socialist for the 5-6 last years

So all this to point out that perhaps socialists are not "perfect", the current crisis seems more to be the results of right wings liberal politics. Liberals are the ones who protect brokers. Sorry to disappoint you, but i'am not sure that any "socialist" has to accept full responsibility for all this mess.

stephane commented on October 11, 2011 at 5:10 p.m.

Urf... I have just reread my post... Sorry for the awful English, I should have been more careful :/

Brut commented on October 11, 2011 at 5:49 p.m.

Pietro,

If and only if the money in a country is equally distributed among its population you can equally blame all of their citizens. Of all the numerous statistics we are given to measure the "strength" of a country, I can never found the distribution of cumulated wealth by percentage of population. But I think you can agree with me that most of the wealth is in the hands of a few. Thus, it seems to me hugely hypocritical to mainly blame the workers of a country for this situation. Sure, there are many problems like tax evasion that should be rapidly dealt with but don't ignore where this *global* crisis comes from. Hint: it wasn't a greek fireman or postman. So don't assume global corporations don't lobby or create intrincate strategies for massive tax evasion and law-skipping that significantly erode global economy on a daily basis. Greed from multinational corporations is the fundamental reason for this crisis and most of global problems today, for that matter. Just keep defending your masters, they surely will get you a cookie.

And, by the way, socialism or neoliberalism are not "teams". So try to think rationally instead of searching absurd arguments to defend your preassumed position in a debate.

BonBon commented on October 11, 2011 at 10:04 p.m.

Right on Mathias, you just demonstrated exactly why the neoliberal fools should STFU - a complete ignorance of the facts, for starters. The Greek New Democracy party could be described as many kinds of perversion (including neoliberals), but socialist definitely not.

The "irrational exuberance" of failed liberalism is the problem.

Edson commented on October 12, 2011 at 12:39 a.m.

@BonBon: "irrational exuberance" was great! Kind of mumbo-jumbo that major liberal economic leaders uses to describe the system fault's

Daniel Elstner commented on October 13, 2011 at 6:28 a.m.

Well historically, neoliberalism (specifically ordoliberalism, i.e. Freiburg school) is actually the theoretical foundation of the social market economy in Germany. Unfortunately the term has been mangled beyond recognition nowadays; it's basically meaningless. Let them hate so-called "neoliberals", they are talking about something else than we do anyway.